Market Report: Pension fund's placing holds Lucas shares back

LUCAS INDUSTRIES, the recovering aerospace and car components group, missed a stock market advance - by courtesy of its pension fund.

The shares retreated 5p to 210p as Smith New Court moved into the market with a 20 million sell order. It placed the shares with institutional investors at 208p. Smith, it is thought, paid the pension fund 205p.

The Lucas fund has been gradually reducing its involvement. At one time it had 15 per cent, a shareholding that created some controversy as it was seen in some quarters as a protective stake in any bid battle.

It now has around 7 per cent of the capital with a 10 per cent holding in the warrants.

The pension fund cut its holding the day after it was announced that Sir Brian Pearse, former Midland Bank chief executive, was joining the board and would succeed Sir Anthony Gill as chairman.

At the start of this month George Simpson, ex-British Aerospace, took over as chief executive.

Elsewhere shares were in a more confident mood, mirroring New York's overnight performance.

At one time the FT-SE 100 index was up 31.6 points but a poor Wall Street opening and weak overseas bond markets dampened enthusiasm.

By the close the gain had been cut to 19.2 at 3,125.3. Government stocks finished off their best, up to three-quarters of a point higher.

New York had been inspired by a profit upsurge by the Du Pont chemical giant, but then fears of higher US interest rates took their toll.

Yorkshire-Tyne Tees Television, with interim results due next month, was back on the takeover screen. The shares jumped 14p to 313p with the warrants 29p higher at at 164p. But Carlton Communications fell 14p to 910p with Smith said to be selling stock.

Vodafone was dismissive of today's launch of the rival Hutchisson Orange telephone network, gaining 5p to 527p.

Lasmo, the oil group, dipped 2p to 153p as the market continued to await the expected takeover bid. The nil paid rights were 1p down at 49p. Trading was again brisk, with Seaq putting volume at 18 million shares and 5.8 million nil paid.

Airtours, the holiday group, fell 14p to 466p as it moved nearer to winning the Scandinavian SAS holiday group. A rights issue to fund the deal is expected in the next few days. David Crossland, chairman and a big shareholder, is not expected to take up his full entitlement of the rights.

Beers were ruffled by rumoured Smith bearishness, but Grand Metropolitan put on 4p to 465p as Panmure Gordon said buy, lifting its profit forecasts to pounds 995m and pounds 1.1bn. Last year Grand Met achieved pounds 630m.

Barclays was another to attract buy comment - from SG Warburg. The new chief executive, Martin Taylor, made encouraging noises when he visited the bank's securities arm, Barclays de Zoete Wedd. He was due to see Cazenove last night. The shares rose 7p to 516p.

Chemicals enjoyed the unexpected bonus of the Du Pont results. Courtaulds rose 13p to 558p and Laporte 10p to 809p (after 820p).

Imperial Chemical Industries, first quarter figures tomorrow, gained 5p to 837p.

Option activity spurred Cadbury Schweppes 10p to 476p and Unilever attracted some keen oveseas attention, rising 15p to 1,090p.

BAT Industries responded to its US tobacco strike with a 12.5p improvement to 456.5p. Compass, the contract catering group which has been weak recently on a stock overhang, lost 13p to 316p. It is negotiating to buy a US contract caterer, which will involve a rights issue.

Kingfisher gave ground, down 10p at 587p. The shares were ruffled by talk of management changes at the B&Q do-it-yourself offshoot. J Sainsbury put on 13p to 362p, reflecting its decision to open stores in France.

Albert Fisher, the food group, fell 3p to 54p and the nil paid rights halved to 1.5p. It is making a one-for-six rights issue at 52p to raise pounds 51.2m.

Carl Short, at Societe Generale Strauss Turnbull, is unimpressed and suggests the shares should be sold. But Williams de Broe is less severe - hang on for recovery and buy for the yield, suggests David Hallam.

Electricities settled down after the mauling of the past two trading days. Eastern fell 6p to 594p. It is raising pounds 350m though a bond issue. Waters had a difficult session.

Sherwood Computer Services slipped 5p to 110p. It said it was not involved in takeover talks. Rival MMT Computing has raised its stake to 4.06 per cent.

Takeover speculation pushed MR Data Management another 8p higher to 216p.

Suter, the mini-conglomerate, recovered 6p to 197p following a denial that the Inland Revenue was investing the company or David Abell, its chairman.

John Jarvis, the ex-Ladbroke executive who created the unquoted Jarvis Hotels, regarded as one of the most efficient hotel groups in Britain, could emerge as the saviour of Resort Hotels, deep in debt and without a share quote. He has apparently been given until the end of May by Resort's banks to put together a scheme; one possibility is a Jarvis/Resort merger.

Emerald Energy, the little oil group, held at 2.75p. It has raised pounds 660,000 through a placing of 25 million shares (at 2.75p) to buy and develop gas fields in West Virginia, close to its existing fields. The deal involves about 200 wells. Emerald still has cash in the bank from its November flotation but these funds are already earmarked for US drilling operations.